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SMALL BUT MIGHTY: LOCAL REC MAY BE OLDEST IN NATION

Kalona News, Thursday, April 1, 1993 by Mary Zielinski

When it comes to being first with the light, the Frytown-based Farmers
Rural Electric Cooperative is a true live wire. Not only is the 76-year-old
company the oldest rural electric cooperative in Iowa, it may well be the oldest
in the nation.

Formed as a stock company in the fall of 1916, it predates the formation of
the national Rural Electrification Administration by 20 years. As far as the
National Rural Electric Cooperative Association can find, the local Farmers
Co-op "is probably the oldest. We don't have any records indicating any prior to
July 2, 1935," said their media representative.

Neither did the Edison Institute, although it acknowledged that local
cooperatives were being formed during the 1920's.

But the Frytown one was still way ahead since its roots date to 1909 when
farmers in the Kalona area met to consider how to get electricity. It is more
than likely their meetings followed President Theodore Roosevelt's appointment
of a national commission to examine disparities between rural and city life.
Roosevelt specifically wanted a way to bring electricity to rural America.

By 1916, the cooperative was in place as the Farmers Light and Power Company
and in the fall of 1917, received the first franchise for rural lines in Johnson
County, permitting it to install lines in Sharon and Washington Townships. It
then became the first to bring electric service to rural areas in Johnson,
Washington, and Iowa counties.

With IE

The same year the Co-op received the franchise, the Fosdick Electric Company
was formed in Kalona, buying electricity from Iowa Electric and reselling it to
the town of Kalona, and to the Farmers Electric Cooperative.

Evidently, the organizing group was a determined one, since shortly after
they formally organized in 1916, they built six miles of line without knowing
where they would obtain the electricity.

It's more than optimism, though, that has made the company unique. Since it
began nearly 77 years ago, it has operated entirely without government loans.
Even after the REA was formed.

"Independence was important to them from the beginning," explained Wallace
(Wally) Fisher, who was the company's manager for "40 years, more or less."

"The original share price was $175," he said, "and back in 1917, they (the
shareholders) did all the labor themselves. They were not any experts, but as
farmers they were used to having to do things themselves. In fact, it usually
was easier to do it themselves.

Of course, back then the only way to get electricity was to finance and build
it yourself. Even so, they were quite forward thinking since they built a system
that had 7,200 volts at a period when Kalona had a 2,400 volt system.

It is also the only REC in the state that buys electricity directly from Iowa
Electric, a relationship that goes back to the 1920's when IE acquired Fosdick
Company and later, the Kalona Light and Power Company (that began in 1914 as
Kalona Illuminating Company).

Back in the early days of the company, things were done with horses and
wagons and hand tools, and if problems arose members were responsible for them.
Fisher recounts that sometime in 1919 a housemover named McGinnis was killed
when he climbed up on the house and lifted the electric wires. The lines
belonged to the Farmers Electric that, at that time, had no insurance. So each
member was assessed $20 to cover the costs of the accident.

Fisher knows firsthand what it means to do everything. Although he served the
company for a number of years as its manager, he was also its lineman, salesman,
foreman, promoter, "and anything else that came along."

The lineman designation came about very simply -- something had to be done,
so he climbed a pole and learned.

"It was strictly on the job training."

Until 1972, he also provided the company with the only office it had --
operating from his home. His late wife served as the bookkeeper-secretary.

The company obtained land in 1970, building the office and warehouse that now
houses all its operation at the southeast edge of Frytown, just behind the huge
Yoder, Inc. complex.

It's grown some since the first six miles of line to 102 miles with 628
meters and 506 members.

The amount of customers will increase later this year when it gains
approximately 60 more through an agreement with IE.

In many ways, its size may have guaranteed its success: it never got too big
to handle with a small dedicated staff. Today, that staff is Warren McKenna,
manager, Jim Miller and Matt Zimmerman, lineman, and Lois Schneider, office
manager. And yes, the horses and wagons have long been replaced with trucks
(including a boom truck, first of which was bought in 1950 and a power digger in
1952).

The company has used two-way radios since 1955, a year after it provided
everything for the area's first all-electric home.

It also provides all the services for the area's all-electric Washington
Township School, built in 1963.

It installed a load management system in 1987, and has kept pace with its
customers since 1916. In fact, it often anticipates them.

However, since it is located in the middle of an Amish community, it has some
service request quite different from the average electric company -- rural or
otherwise.

"We do get requests to take the electricity out of a house," explained
McKenna. "It happens when an Old Order Amish family acquires a property that
previously was non-Amish." "Then, the reverse happens," he added, noting,
"surprisingly, it pretty much averages out." Do you ever have to go back and
re-connect a house? "Oh yes, that's not unusual." Even if they are not its
customers, the Cooperative provides the Amish with other services -- assisting
them with raising windmill towers, tree trimming and other. "There is a fee
charged," he said, and other Amish have also made requests for such service.

Therein lies much of the small company's reason for survival: it is a
personal type of service, one that knows its customers quite well, understands
their needs. As a result, it has always aimed at providing the necessary service
at a good, fair price. As far as IE is concerned, its relationship with the
Co-op is "strong and friendly", noted IE representative Darrel Stolzer. The two
utility companies have an annual meeting where they discuss business and a
shared history. At various times they have shared responsibilities and even an
employee -- Wally Fisher. "He was an employee for IE as well as for the Co-op,"
explained Stolzer, something that both companies saw as "mutually beneficial."
As for the rest of the partnership, both companies see no reason for it not to
continue for a long time.